Ambulance Industry Avoids Fiscal Cliff (For Now)

A Sigh of Relief!

The ambulance industry avoided its own “Fiscal Cliff” when Congress took final action late New Year’s Day by passing the American Taxpayer Relief Act (H.R. 8), which President Obama quickly signed into law on January 2nd.

It was a close one this year.

Most industry analysts did not expect the Medicare bonus payments of 2% Urban, 3% Rural and 22.6% Super Rural along with Air Ambulance designations to be continued.  However, given the uncertainty in Washington of the past few weeks, ambulance saw a reprieve of sorts riding the coattails of other stop-gap measures passed, for the time being, and due in large part to the tireless efforts of the American Ambulance Association’s lobbying of key Congressional leaders.

AIF Checks in at 0.8%

With this year’s Ambulance Inflation Factor (AIF) only checking in at a modest 0.8%, the loss of the bonus payments would have been extremely difficult for many ambulance service providers and suppliers to absorb given already strained EMS budgets across the United States.

Now those bonus payments have been extended for ground ambulance through December 31, 2013 with Air Ambulance boosts continued through the end of June.


However, the moves of the past few days come with some uncertainty.

Still looming over the next two months will be a debate regarding something called Sequestration.  Sequestration was a pre-determined and planned 2% cut, across the board, in payments to Medicare providers of all types, ambulance included.  In addition to the potential loss of the bonus payments when 2013 rolled in, was also this 2% cut as part of the larger picture.

Congress has put that discussion off for two months, as part of a larger debate over things like defense cuts and other deficit-cutting measures.

But, come March 1st the industry could see these slices come to the National Medicare Ambulance Fee Schedule.  We’ll have to wait to see how that debate goes when the new Congress take their seats.

The Bad News

Not all ambulance providers and suppliers fared well in this latest round of 11th hour moves.

Ambulance companies that provide services to End Stage Renal Disease patients will see their reimbursements sliced by a whopping ten percent (10%) come October 1, 2013!

Quite frankly, our eyes popped when we read that part of the legislation.

This drastic cut was a bold move by Congress in answer to the recent MedPAC warnings (see our blog from December 7th for a more detailed look at MedPAC) bolstered by companion alarms sounded by the General Accounting Office (GAO) and the Office of Inspector General (OIG).

You’ll recall that MedPAC recommended a decrease of 5.7% for BLS Non-Emergency transport payments across the board, given their findings of alarming growth in dialysis-type transports and the growth of the number ambulance suppliers and providers billing Medicare for those transports.  Couple that with stern observations by GAO and OIG noting the amount of suspected and documented cases of fraud and abuse among some of those same providers and suppliers and we’re sure Congress felt it had no choice but to take action on the matter at hand.

But, instead of targeting all BLS Non-Emergency payments for cuts; Congress apparently decided to use its scalpel to excise what they determined is the root of the problem by enacting a big surgical cut to the ESRD-patient-related transport reimbursement rates.

This comes as no surprise as the Center for Medicare and Medicaid Services (CMS) has continually issued opinions and direction that placed doubt on the overall medical necessity need for ESRD patients to use an ambulance when being transported for their healthcare needs, most notably to and from their dialysis treatments.

HHS Mandated Studies

The legislation calls upon the Department of Health and Human Services (HHS) to conduct two studies in the coming months.

Hospital-Based Study

The first study that Congress is calling for is for HHS to analyze data extrapolated from data on existing cost reports for hospital-based ambulance providers.  That report is mandated to be handed up to Congress by October 1, 2013.

Cost Data Collection Feasibility

The second study is one that the ambulance industry should watch very closely as it could mean more paperwork.

This study, which must be completed by July 1, 2014, is supposed to provide Congress with a look at the feasibility of periodically obtaining cost data from all ambulance service providers and suppliers across the Country.  The idea of such a cost report requirement would be to give Congress some kind of means of examining the appropriateness of ambulance add-on payments.

HHS is required to consult the ambulance industry for recommendations on the potential design and collection processes and gain input on the use of surveys and cost reports to collect such data.
In essence, Congress is looking to institute a cost reporting tool and they specifically mention how they desire to review costs for providing ambulance services in rural and super rural designated areas.

Okay in Theory…but…

In theory, we understand that Congress must be responsible when handing out dollars to the ambulance industry, as it must with the entire healthcare industry.  However, as we all know nothing that Congress does turns out to be simple.

For example, fresh in our minds is the debacle called Medicare Revalidation.  Imagine having to collect dollar data from your department and providing it on some yet-to-be-determined government reporting platform on a continual basis.

This may be fine for a larger EMS department or system that can devote human resources to meeting the requirement.  However, when Congress specifically states they want to look at rural and super rural providers and suppliers, now we’re talking about collecting data from ambulance departments that are small, most definitely including an all-volunteer element with no human resources to spare beyond getting the EMS job done on a daily basis.

We approach this with caution because it smells of more government intrusion into our daily EMS lives.  We can only wait to see what happens.

We Remain on the Alert!

Our clients can rest assured that we will keep on top of these very important issues.  As soon as the adjusted Medicare National Ambulance Fee Schedule is published as a Published Usage File (PUF), we’ll have the numbers at our fingertips.  Those new Medicare reimbursements rates will be added to our clients’ billing profiles for tabulation of the actual net expected amounts for affected claims.

Not a client?  Does your billing office or outsource company stay on top of these issues like we do?  If not, then maybe it’s time to contact us so we can take a look at your needs and provide you with up-to-date analysis like we’ve done here today.  We look forward to hearing from you!

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